AEO-T1Certificate This certificate may be

granted only to an importer or to an exporter.

For the purpose of this certificate,
(i) the Importer/ Exporter should fulfill the criteria
mentioned at para 3.1 below; and
(ii) All other requirements as stipulated in paragraphs
3.2, 3.3 and 3.4 below shall be considered to have
been met if the information and documents submitted
by the applicant prove the claims of the applicant to
the satisfaction of the AEO Programme Manager.

1.5 Benefits of an AEO Certificate

The scope of the benefits to the AEOs based on their
categories would be as mentioned below:
1.5.1 Benefits for AEO-T1:
i. They shall be accorded high level of facilitation in
imports and export of their consignments, thereby
ensuring shorter cargo release time.
ii. Facility of Direct Port Delivery (DPD) of their import
Containers and/ or Direct Port Entry (DPE) of their
Export Containers would be available to them.
However, this facility will be dependent on the volume
of their Import/ Export trade in terms of number of
containers.
iii. ID cards to be granted to authorized personnel for
hassle free entry to Custom Houses, CFSs and ICDs.
iv. Wherever feasible, they will get separate space
earmarked in Custodians premises.
v. In case they are required to furnish a Bank
Guarantee, the quantum of the Bank Guarantee would
be 50% of that required to be furnished by an importer/
exporter who is not an AEO Certificate Holder.
However,
this
exemption
fromBank
guarantee
wouldnot be applicable in cases where the Competent
Authority orders furnishing of Bank Guarantee for
provisional release of seized goods.
vi. Investigations, if any, in respect of Customs, Central
Excise and Service Tax cases would be completed, as
far as possible, in six to nine months.
vii. Dispute resolution at the level of Adjudicating
Authorities in respect of Customs, Central Excise and
Service Tax cases would be done preferably and as far
as possible within six months.
viii. They will not be subjected to regular transactional
PCA, instead of that onsite PCA will be conducted once
in two years only.
ix. They will get an e-mail regarding arrival/ departure
of the vessel carrying their consignments.
x. 24/7 clearances on request at all sea ports and
airports No Merchant Overtime Fee (MOT) charges
need to be paid.

Eligibility conditions and criteria for granting the

AEO certificate

3.1 Who can apply for AEO certificate?

3.1.1 Anyone involved in the international supply chain
that undertakes Customs related activity in India can
apply for AEO status irrespective of size of the
business. These may include exporters, importers,
logistic providers (e.g. carriers, airlines, freight
forwarders, etc.), Custodians or Terminal Operators,
Customs House Agents and Warehouse Owners. Others
who may qualify include port operators, authorized
couriers, stevedores. The list is not exhaustive.
3.1.2 Businesses that are not involved in Customs
related work / activities will not be entitled to apply.
This means that in general, banks, insurance
companies, consultants and the like categories of
businesses will not be eligible for AEO status.
3.1.3 Application for AEO status will only cover the
legal entity of the applicant and will not automatically
apply to a group of companies.
3.1.4 There is no provision to grant AEO status to
specific site, division or branch of legal entity of the
applicant. The application must cover all the activities
and locations of the legal entity involved in the
international supply chain and the prescribed criteria
will be applied across all those activities and locations.
3.1.5 In order to apply for AEO status the applicant
must be established in India. For this purpose, the
applicant should provide evidence which may include:
(i) A certificate of registration issued by the Registrar of
Companies.
(ii) Details of places/locations where goods are being
handled, e.g. loading, unloading, storage etc., in the
course of supply to/from international supply chain.
(iii) Proof that the business has its own accounts.
3.1.6 The applicant should have business activities for
at least three financial years preceding the date of
application. However in exceptional cases, on the basis
of physical verification of internal controls of a newly
established business entity, the AEO Programme
Manager may consider it for certification.
3.1.7 Keeping the small and medium scale enterprises
in mind it has been decided the AEO programme is
made open to all Importers/Exporters whose threshold
of import or export declarations is 25 documents i.e.
either Bills of Entry or Shipping Bills during the last
financial year. The other economic operators should
have handled at least 25 documents i.e. Bills of Entry
or Shipping bills during the last financial year.

3.1.8 An AEO status applies only to the legal entity

applying for such status in its own capacity and
covering its role in the international supply chain.
Therefore, AEO status can be granted to a Customs
Broker, but this will not confer similar status on its
client importers / exporters who will need to apply
separately for that status.
3.1.9 The AEO Programme is open to all economic
operators, including micro, small and medium
enterprises (MSMEs) and the eligibility conditions and
criteria for granting the AEO Certificates are the same
for all economic operators regardless of their size.
However, the AEO Programme Manager shall take due
account of the specific characteristics of economic
operators, in particular of MSMEs, while applying the
eligibility conditions and criteria prescribed under
paras 3.3 (relating to management of commercial and
transport records), and those under paras 3.5 (relating
to safety and security) for granting the above AEO
Certificates. The AEO Programme Manager shall take
into account such factors as the size of the MSMEs, the
legal status (e.g. proprietorship, partnership etc), the
structure, the key business partners and also the
specific economic activity of the economic operator
while applying these eligibility conditions and criteria
specified under paras 3.3 and 3.5.
In particular, the AEO Programme Manager shall take
into account the possible difficulties for MSMEs in
meeting with these eligibility conditions and criteria
under paras 3.3 and 3.5 with a view to make the above
AEO certificates more available to MSMEs. The criteria
of turnover indicated in MSME Act would be taken into
consideration for categorization of entities into Micro,
Small and Medium Enterprises.

be taken of the nature of cases and decision would be

taken on issue or continuance of AEO status by AEO
Programme Manager.
Explanation: for para 3.2.1, 3.2.2 and 3.2.3 above, the
cases where the show cause notices have been
dropped or decided in favour of the applicant by the
adjudicating or appellate authorities will not be
considered.
3.2.4 An applicant will also need to demonstrate that
he has:
i. procedures in place to identify and disclose any
irregularities or errors to the Customs
authorities or, where appropriate, other regulatory
bodies.
ii. taken appropriate remedial action when irregularities
or errors are identified.
3.2.5 Once an error has been identified, the applicant
is expected to take steps to ensure that they do not
happen again or, at least, to ensure that they are
immediately remedied if they do arise. Failure to take
such steps could count against applicant.

3.3
Managing
commercial
appropriate) transport records:

and

(where

The applicant should have a satisfactory system of

managing commercial and, where appropriate,
transport records. To enable the AEO Programme
Manager to establish that the applicant indeed has
such a system, the applicant shall:

3.1.10 DG(Systems), CBEC will progressively introduce

an ICT based solution, which will not only cater to the
management of AEO enrolment life-cycle but will also
help ensure that all Authorized Economic Operators
receive high quality service. All communication
between AEO/AEO applicants and Programme Manager
shall be through e-mail at Aeo.India@icegate.gov.in.

i. Maintain an accounting system consistent with

Generally Accepted Accounting Principles (GAAP) /
International Financial Reporting Standards (IFRS)
which facilitates audit-basedCustoms control;

3.2 Legal Compliance:

iii. Wherever applicable, have satisfactory procedures

in place for the handling of licenses and authorizations
connected to export/import;

3.2.1 There should be no show cause notice issued to

them during last three financial years involving fraud,
forgery, outright smuggling, clandestine removal of
excisable goods or cases where Service Tax has been
collected from customers but not deposited to the
Government.

ii. Have an administrative set up which corresponds to

the type and size of business and which is suitable for
the management of the flow of goods, and have
internal controls capable of detecting illegal or irregular
transactions;

iv. Have satisfactory procedures in place for archiving

of the companys records and information, and also for
protection against the loss of information;

3.2.2 There should be no case wherein prosecution has

been launched or is being contemplated against the
applicant or its senior management.

v. Ensure that employees are made aware of the need

to inform
the Customs authorities
whenever
compliance difficulties are discovered and establish
suitable contacts to inform the Customs authorities of
such occurrences;

3.2.3 If the ratio of disputed duty demanded or

drawback demanded or sought to be denied, in all the
show cause notices issued under the Customs Act,
1962 (other than those mentioned in Para

vi. Have satisfactory procedures for verifying the

accuracy of Customs declarations.

3.2.1 and 3.2.2) during the last three financial years, to

the total duty paid and drawback claimed during the
said period is more than ten percent, a review would

vii. Have appropriate information technology security

measures to protect the applicants computer system
from unauthorized intrusion and to secure the
applicants documentation.

(ii) Where the deficiency noticed in the application

cannot be remedied.
3.4 Financial solvency
An applicant must be financially solvent during the
three financial years preceding the date of application.
The applicant should not be listed currently as
insolvent, or in liquidation or bankruptcy. Further, the
applicant should not have defaulted in payment of due
Customs duties during the past three years. The
applicants must submit an undertaking regarding its
solvency and a Solvency Certificate issued by the
Statutory Auditor of the applicant.

The information regarding the rejection of such

application will be given to the applicant within 30
days of the receipt of the application.

4.4 Processing of application:

4.4.1 On receipt of the complete application and after
ensuring that the applicant is eligible to apply, the
information and documents submitted by the applicant
shall be scrutinized to assess whether or not the
eligibility conditions and criteria for granting the AEO
certificate as mentioned under the Section 3 of this
circular are met by the applicant.

4.1 Acknowledgement of application

4.4.2 If necessary, further information and/or

documents in support of the claim of the applicant may
be called for by the AEO Programme Manager or by an
officer on his behalf. Such request shall be sent in
writing.

Each application will be acknowledged and recorded in

an AEO Programme database.

4.4.3 The applicant shall submit such information

and/or documents within a reasonable time.

4.2 Return of application:

4.4.4 In case of an application for grant of AEO-T1

status, once the eligibility conditions and criteria for
granting the AEO certificate as mentioned under the
Section 3 of this circular are found to have been met by
the applicant to the satisfaction of the AEO Programme
Manager, the applicant shall be issued the AEOT1certificate within 30 days of submission of the
information and/or documents.

Procedure for issuing AEO certificates

4.2.1 If application is incomplete or deficient, the

applicant will be suitably informed within 30days of the
receipt.

4.2.2 In following cases, the application will not be

processed until the deficiencies, as indicated, are
rectified:
i. Which is incomplete This may be resubmitted with
the complete information.
ii. Where the application has not been made by a legal
person This can only be resubmitted by the
concerned legal entity.
iii. Where no responsible person is nominated as the
Point of Contact This can only be resubmitted when
the applicant nominates a responsible person who will
be the point of contact for the AEO Programme.
iv. Where the applicant is subject to bankruptcy
proceedings at the time the application is made
- This may be resubmitted when the applicant becomes
solvent.
v. Where a previously granted AEO status has been
revoked -This may not be resubmitted until the period
as prescribed in paragraph 5.7.3 has elapsed after the
date of revocation.
4.3 Rejection of application:
The application shall not be accepted in any of the
cases:
(i) Where the applicant is not eligible for grant of AEO
status, or

4.4.5.1 The AEO Programme Team will, within 90 days,

visit the business premises for verification of the
information and documents provided. Such visit shall
be made on a convenient date after consulting the
applicant.
4.4.5.2 If within 45 days of the date of intimation
issued in terms of paragraph 4.4.5, the applicant has
not been contacted by the AEO Programme Team, then
the applicant should contact the AEO Programme
Manager immediately.

4.5 Certification:
4.5.1. If AEO status is granted, the AEO Programme
Manager shall send the Certificate of AEO Status to the
applicant in hard copy along with an electronic copy.
The Certificate shall bear the AEO logo that may be
used where it is appropriate to do so for the business,
for example, company stationary, signage on vehicles
or other publicity materials. The copyright for the logo
is owned by the AEO Programme Manager on behalf of
the Indian Customs Administration.
4.5.2. The AEO status will be activated within a week
from the date of issue. Following this period, the
applicant should enter the AEO certificate number on
all Customs documentation to indicate their AEO
Status.
4.5.3 It is highly recommended that the applicant
should keep the Certificate of AEO status at a safe

place and not release the AEO Certificate number to

anyone unless required to do so for business purposes.
Although the AEO status can be advertised by the
applicant, the AEO Certificate number should not be
part of their advertisement.

Post-Certification Provisions
5.1 Validity of AEO Certificate
The validity of AEO certificate shall be two years for
AEO-T1, three years for AEO-T2, and five years for AEOT3 and AEO-LO.

5.3.4. If the legal entity changes, the AEO status holder

needs to reapply for AEO in the name of new legal
entity.
5.3.5. If the AEO status holder makes Customs related
errors, they must be reported to the local Client
Relationship Manager (CRM) as well as the AEO
Programme Team. Errors that are voluntarily disclosed
will not impact the AEO status provided that the AEO
status holder has:
(i) Examined the reasons for the errors.
(ii) Taken appropriate remedial action to prevent
recurrence.

5.2 Renewal of AEO certificate

5.4 Review of AEO Status:

5.2.1 The AEOs, if they so desire to continue their AEO

status and avail the benefits, must submit their
application as stipulated under Section 2 of this
circular, before lapse of their validity as per the
following:-

5.4.1 The AEO Programme Team will review AEO status

periodically to ensure continued adherence to the
conditions and standards of grant of Certificate of AEO
Status. Thus, it is recommended that the AEO status
holder should continue to re-assess its compliance with
the conditions of certification and act upon any
identified problems as soon as they arise. The
frequency of such review will be two years, three years,
five years and five years in case of AEO-T1, AEO-T2,
AEO-T3 and AEO-LO respectively. As far as possible, the
review and the onsite PCA, if applicable, will be
conducted simultaneously.

AEO status Time limit for submission of application for

renewal before lapse of validity
AEO-T1

30 days

5.5 Suspension or downgrading of AEO Status:

While submitting the application for renewal, the
applicant must clearly highlight the changes from the
last application.
5.2.3 AEO Programme Manager will consider the
renewal applications by following the procedure
adopted while granting the fresh AEO status.

5.3 Maintenance of AEO Status:

5.3.1 After obtaining AEO status, the AEO status holder
should maintain their eligibility by adhering to the
appropriate standards.
5.3.2 The holder of a Certificate of AEO Status is
required to notify any significant change in business
and processes which may affect the AEO status to the
AEO Programme Team. These changes may include the
following:
(i) Change to the legal entity.
(ii) Change of business name and/or address.
(iii) Change in the nature
manufacturer / exporter etc.

of

business

i.e.

(iv) Changes to accounting and computer systems.

(v) Changes to the senior personnel responsible for
Customs matters.
(vi) Addition or deletion of locations or branches
involved in international supply chain.
5.3.3 The AEO status holder should notify the AEO
Programme Team as soon as the change is known or,
at least within 14 days of the change taking place.

5.5.1 The AEO Programme Manager may suspend the

Certificate of AEO Status in the following cases:
i. Where any non-compliance with the conditions or
criteria for the Certificate of AEO Status has been
detected; or
ii. In the case of a Custodian or Custom Broker or
Warehouse Operator, where the basic license as a
Custodian or Custom Broker or Warehouse Operator, as
the case may be, has been suspended by the
competent authority.
5.5.2 In the case of an AEO importer or an AEO
exporter, if any show cause notice has been issued
alleging
infringement
of
Customs/Central
Excise/Service Tax law, other than those covered under
para 3.2.1, AEO Programme Manager may downgrade
the status of an AEO-T3 to AEO-T2 or AEO-T1, or
downgrade the status of an AEO-T2 to AEO-T1, or
suspend the status of the AEO, as deemed appropriate.
The decision shall be taken after due diligence and on
careful evaluation of the material evidence and
arguments against the AEO of the case. The AEO
Programme Manager may consult the jurisdictional
Commissionerate before arriving at the final decision in
this regard. The decision to downgrade the AEO status
shall be purely an administrative decision. Restoration
of suspended/ downgraded AEO Status:
5.6.1 Where AEO status had been suspended on
account of detection of any non-compliance with the
conditions or criteria for the Certificate of AEO Status,
and if the AEO holder takes the necessary remedial
measures to the satisfaction of the AEO Programme
Manager within 60 days of suspension, the AEO
Programme Manager may restore the AEO status from
a date to be notified by him.

5.6.2 Where AEO status had been suspended on

account of suspension of the basic license as a
Custodian or Custom Broker or Warehouse Operator or
as the case may be, and subsequently such suspension
of the basic license is revoked by the competent
authority, the AEO Programme Manager may consider
restoration of AEO status, and if deemed appropriate
may restore the AEO status from a date to be notified
by him.
5.6.3 Where AEO status had been suspended on
account of issue of a show cause notice, and if the ratio
of disputed duty demanded or drawback demanded or
sought to be denied in SCNs issued under the Customs
Act, 1962 during the last three years to the total duty
paid and drawback claimed during the said period is
not more than ten percent, the AEO Programme
Manager may consider restoration of AEO status, and if
deemed appropriate may restore the AEO status from a
date to be notified by him.
5.6.4 In case an AEO status has been downgraded, it
shall be open to the entity to apply again for higher
status as and when the eligibility conditions and
criterion are met by it. AEO Programme Manager will
consider such applications by following the procedure
adopted while granting the fresh AEO status.
5.7 Revocation of AEO Status:
5.7. 1 In following circumstances, the Certificate of AEO
Status will be revoked:
i. Where the Certificate of AEO Status is already
suspended and the AEO holder fails to take the
remedial measure within 60 days to have the
suspension withdrawn; or
ii. Where there is a reasonable belief that an act has
been perpetrated that is liable to lead to prosecution
and /or is linked to an arrest of person under Customs
Act, 1962 as mentioned in Para 3.2.2; or
iii. A show cause notice has been issued to them
involving
fraud,
forgery,
outright
smuggling,
clandestine removal of excisable goods or cases where
Service Tax has been collected from customers but not
deposited to the Government as mentioned in Para
3.2.1; or
iv. Where the AEO status
authorization be revoked.

holder

requests

the

5.7.2 Prior to any decision to revoke authorization, the

applicant will be notified. Revocation is applied from
the day following the authorization holder being
notified.
5.7.3 In case the AEO status is revoked, the AEO-T1
and AEO-T2 status holder will not be entitled to reapply
for the AEO certificate for a period of one year from the
date of revocation.
5.7.4 In case the AEO status is revoked, the AEO-T3and
AEO-LO status holder will not be entitled to reapply for
the AEO certificate for a period of three years from the
date of revocation.